Swedish Collective Bargaining‐A Changing Scene1
| DOI | http://doi.org/10.1111/j.1467-8543.1987.tb00700.x |
| Published date | 01 March 1987 |
| Author | Richard B. Peterson |
| Date | 01 March 1987 |
Swedish Collective Bargaining
-A
Changing Scene’
Richard
B.
Peterson
*
THE SWEDISH MODEL
The Swedish system of collective bargaining during the
1950s
and
1960s
was
commonly viewed as the most successful industrial relations system in the
world. The foundations of Swedish labour-management relations were laid
in the first decade of this century in early agreements between the Swedish
Employers’ Confederation (SAF) and the Swedish Confederation
of
Trade
Unions
(LO).
However, it was not until
1936,
when key SAF and
LO
officials met in Saltsjobaden outside Stockholm, that the labour market
parties were ready to lay down their adversarial arms because they did not
want the State to intervene. Yet the new spirit did not take root
immediately. The Basic Agreement
of
1938
represented a long-term goal
of
the two labour market parties. However, by the mid
1950s
it was clear to
both sides that the Swedish collective bargaining system was functioning
quite well.
What were the basic features
of
the ‘Swedish Model’? H.
G.
Myrdal
(1980,
p.
57)
identified eight distinguishing features. They were: a properly
functioning free market economy; independent and freely competing
enterprises; fully organised labour market with both sides being entirely
independent
of
one another and
of
the state; a highly developed well-
functioning system
of
consultation and participation for employees in the
company; practical reform in stages; general atmosphere
of
pragmatism;
friendly cooperation; and peaceful climate and reasonable compromises.
There was a strong commitment on the part
of
the major labour market
parties to free collective bargaining, but not at the expense
of
the country’s
economic development. There was general agreement that wage policy
should be in line with the economic goals
of
full employment, rapid
economic growth, reasonable price stability, more equal income distribu-
tion, and foreign payments balance (Forseback,
1976).
The
EFO
Economic
Model, developed by the major labour market parties, embodied these
goals
of
elite cooperation.
Centralised collective bargaining was chosen as the most appropriate
structure for reaching these goals. SAF and LO would first reach a ‘frame’
‘Professor
of
Industrial Relations, University
of
Washington.
32
agreement on wages and other key economic issues. Subsequent agreements
would be reached at the national federation and company levels consistent
with the centralised agreement. Then
SAF
would negotiate with the other
trade union confederations
or
cartels.
Labour-management relations functioned quite well for thirty years
(1952-1982).
There was a considerable degree
of
discipline exerted by the
key labour market parties. Government confined itself to a minimal degree
of ‘arm twisting’ (Peterson,
1985).
The results were truly impressive. Bargaining settlements were fairly
reasonable. There were very few legal strikes
or
days lost through offensive
actions during most of this period. The exception was the LKAB strike in
1969.
Pay and working conditions were regulated through central basic and
supplementary agreements. Centralised bargaining protected against the
possibility that small interest groups could make demands at the expense
of
other members of the union work force (Myrdal,
1980).
The system worked
particularly well since the key labour union confederations represented the
vast majority
of
the work force given the fact that
LO
alone covered some
90-95
per cent
of
industrial workers.
Lundberg
(1985)
cites other achievements reached by the mid-1960s such
as: unemployment rates between
1.5-2.5
per cent; inflation rate of
3
per
cent; a high degree of cyclical stability; no balance
of
payment problems; no
visible structural imbalances; and an annual growth rate
of
about
4
per cent.
However, this favourable situation was not to last.
British Journal
of
Industrial Relations
THE BREAKING DOWN
OF
THE ‘SWEDISH
MODEL’
A
number of important economic, political, social and labour market
changes
took
place in the
1970s
and early
1980s
that seriously weakened the
‘Swedish Model’
of
industrial relations. We shall briefly mention some
of
these developments since they help us to understand the present collective
bargaining system.
Economic
Sweden’s economic situation, like that
of
a number
of
other Western
European nations and the United States, worsened after the Oil Shocks
of
1973
and
1979.
What happened to some of the key economic indicators?
1.
Real growth in Gross National Product decreased by more than half the
yearly rate in the
1960s.
The Gross Domestic Product performed even
more poorly (Fakta om Sveriges Ekonomi,
1983;
Jakobsson,
1983).
2.
The Consumer Price Index rose rapidly after the first
Oil
Shock with
annual rates averaging over
10
per cent (Sweden,
1984).
3.
The public sector share
of
GNP rose rapidly during the period
so
that by
1982
public sector expenditures constituted some
67
per cent
of
GNP.
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